Addressing threats to health care's core values, especially those stemming from concentration and abuse of power. Advocating for accountability, integrity, transparency, honesty and ethics in leadership and governance of health care.

Thursday, March 21, 2013

NYU Faculty Vote No Confidence in their President

Faculty at large American universities, in which most of the country's medical schools and teaching hospitals are embedded, are becoming increasingly concerned about the leadership and governance of their organizations, and whether the universities are putting their academic (and clinical) missions ahead of other concerns, like making money and rewarding top executives.

In January, 2013, we discussed a an informal, anonymous vote faculty at the University of Miami medical school expressing no confidence in their dean and his chief lieutenant.

The NYU No Confidence Vote

The faculty of a major component of another big US university have just openly voted no confidence in their president, and are raising questions about their board of trustees. The setting was New York University. Some background comes from a New York Times article this month:

Embarking on an ambitious expansion at home, constructing a network of
new campuses around the globe, wooing intellectual superstars and
raising vast amounts of money, John Sexton of New York University
is the very model of a modern university president — the leader of a
large corporation, pushing for growth on every front.

To some within N.Y.U., Dr. Sexton is a hero who has transformed the
university. The trustees have thanked him by elevating his salary to
nearly $1.5 million from $773,000 and guaranteeing him retirement
benefits of $800,000 a year.

But to others, he is an autocrat who treats all but a few anointed
professors as hired help, ignoring their concerns, informing them of
policies after the fact and otherwise running roughshod over American
academic tradition, in which faculty members are partners in charting a
university’s course.

'He has a very evangelical sense of purpose,' said Andrew Ross,
a professor of social and cultural analysis, 'that does not extend
beyond the concept that the university should be an entity of his own
making.'

'I think,' he added, 'when other administrations see that they say, Well
that’s what leadership should be. And when faculty see that they say,
That is not what university leadership should be. It’s the style of a
maverick C.E.O.'

The debate over Dr. Sexton’s presidency will come to a head this week.
The faculty of the university’s largest school, Arts and Science, has
scheduled a five-day vote of no confidence. Given Dr. Sexton’s
international stature, the vote may serve as the most important
referendum yet on the direction of American higher education.

President Sexton lost the no-confidence vote, as noted in another NY Times article a week later:

The vote, 298 to 224 (with 47 abstaining), took place via electronic
balloting from Monday through Friday. Full-time tenured and tenure-track
professors were asked to respond to the statement: 'The faculty of Arts
and Science has no confidence in John Sexton’s leadership.' Voter
participation was 83 percent.

Top Executives Usurp Power from Faculty

An op-ed in the NY Times by a leading dissenting faculty member further explained the issues. He charged that the President ignored faculty concerns about an ambitious plan to expand the physical plant of the university:

How did Dr. Sexton lose the confidence of so many faculty members? By
ignoring us. Of course, many professors everywhere feel overlooked by
today’s generation of jet-setting university presidents. But we have
very specific complaints: above all, Dr. Sexton has consistently refused
to address concerns about plans to expand N.Y.U. offices and dorms into
the part of Greenwich Village south of Manhattan’s Washington Square
Park, where many of us live.

This expansion plan is known as N.Y.U. 2031, indicating the year in
which all the building will be complete. The very name told us that we’d
be living on a construction site for a couple of decades.

Not surprisingly, this did not go over very well with many faculty
members. We were also concerned about where the money would come from to
pay for this expansion, as no business plan for the project has been
made public.

Thirty-nine departments and schools passed resolutions last year against
the 2031 plan. These resolutions were typically passed unanimously or
nearly unanimously. And yet Dr. Sexton’s response was a deafening
silence.

Furthermore, the faculty were concerned about plans to expand the university overseas to nations not known for their vigorous support of academic freedom and free speech:

Many of us are also concerned with Dr. Sexton’s plans to expand N.Y.U.
overseas, including branch campuses in Abu Dhabi and Shanghai, with
inadequate faculty involvement or oversight. It is doubtful that faculty
members would have chosen to build campuses in countries where academic
freedom, and free speech generally, are so parlous.

Executives Enriching Themselves at University Expense

Finally, the faculty were concerned about top university executives immodestly enriching themselves from the coffers of a non-profit university:

As the faculty vote approached, more trouble arose for Dr. Sexton in the form of news reports about lavish compensation for NY administrators. The central but by no means sole figure in this scandal is Jacob J Lew, the Obama administration’s new Treasury secretary, who worked at N.Y.U.
in the early 2000s for a salary that eventually reached $900,000,
larger even than Dr. Sexton’s at the time.

Mr. Lew received loans to buy a nice home, which apparently were largely
forgiven. He also received a severance of some $700,000 when he left
for a well-paid position at Citigroup. Severance? For someone who leaves
voluntarily?

Dr. Sexton himself is to receive a salary of more than $1.4 million this year, and a 'length of service' bonus of $2.5 million in 2015.
(Full disclosure: the university gave me a set of mugs when I completed
25 years of teaching.) And he will receive $800,000 a year after he
retires.

Other top administrators make similarly extravagant salaries. Some
experts believe there may even be something illegal in the way Dr.
Sexton has rewarded them; N.Y.U.’s chapter of the American Association
of University Professors has asked New York States’s attorney general to
investigate.

All of which raises a question for many N.Y.U. faculty members: Should
administrators be able to enrich themselves like this at educational
institutions? N.Y.U. is not a Wall Street firm, but a tax-exempt
university that gets millions in taxpayer dollars, not least from student loans.
In fact, our students have the highest total debt load of any
university in the country. Rather than expanding, or paying huge
salaries to top administrators, why doesn’t N.Y.U. do more to help its
alumni pay off their debts?

Forsaking the Academic Mission

An article in Inside Higher Education underlined how the dispute is really about the mission of the university in this brave new corporate era:

As Rebecca Karl, an associate professor of East Asian studies and history recently told Inside Higher Ed, 'We’ve become very critical of the whole idea of ‘expand or die,’ which
of course is a corporate maxim, but we don’t understand why it needs to
become our maxim.'

Also,

Mark Crispin Miller, a professor of media, culture and communication in
NYU's Steinhardt School of Culture, Education and Human Development, who
has been an outspoken critic of the Greenwich Village plan [said]. 'The fact
is we see NYU as a school, we see our mission as educational. Sexton and
the trustees who support him view NYU as a bundle of assets whole value
they will apparently do anything to maximize on paper. We believe that
this approach is destroying this university.'

By the way, maybe in retrospect the trustees' role should not be so surprising. Back in 2011 we posted about a group of extremely rich corporate and finance leaders who attacked critics of their growing power as "imbeciles," among other terms. Several of the individuals featured in the news article which inspired this post were trustees of New York University. These included Kenneth Langone and John Paulson. A quick look at the list of current trustees shows that it includes many top leaders of finance firms, including firms whose actions were alleged to have helped cause the great recession/ global financial collapse or have been subsequently accused of other financial shenanigans, e.g., Steven S Miller, a Vice President of JP Morgan Chase, and Maurice Greenberg (a life trustee), former leader of AIG, E John Rosenwald Jr (a life trustee), Vice Chairman Emeritus of JP Morgan Chase, and William R Salomon (a life trustee), honorary chairman of Citigroup.

Summary

In summary, the issues that inspired the no-confidence vote against the President of New York University appeared to be allegations that university:
- administration usurped power, particularly from the faculty
- administration used this power to put corporate priorities, like expansion for its own sake, and increasing short-term revenue ahead of the academic mission
- administration took advantage of their power to enrich themselves
- trustees, who are supposed to exert stewardship that ensures the university upholds its mission, instead aided and abetted all this

All of these should be very familiar issues to Health Care Renewal readers. We have discussed the rise of generic managers of health care organizations, trained supposedly in general management skills, but not in health care, and indifferent at best to the values of health care professionals. At times their power has gotten so great as to constitute a manager's coup d'etat. We have discussed how managers of health care organizations often put short-term revenue ahead of all other concerns, sometimes called financialization. In doing so, they may end up perpetrating mission hostile- management. We have discussed how managers are able to command often outrageous levels of executive compensation. Boards of trustees, who are supposed to exert stewardship over the organization, and see that its leadership upholds its values, often come from management backgrounds themselves, and are at best clueless about, if not hostile to the mission.

It is time for university faculty to defend their institutions' mission. Students, alumni, and patients at academic medical centers, medical school clinics, and of academic health professionals ought to be equally fervent in support of the academic and academic health care missions. Academic medicine needs to be lead and stewarded by people who understand that mission, value it, uphold it, and are accountable for that. These leaders and stewards should eschew management fads, cronyism, and excess personal enrichment.

Maybe the vote of no confidence at NYU is a small step on the path back to the academic and academic medical missions. But do not expect those who are enriching themselves in the current system to go quietly.

ADDENDUM - see also this post by Prof Margaret Soltan on the University Diary blog.

6 comments:

Interestingly in the March 21, 2013 print edition of The Wall Street Journal story Pittsburgh Challenges Medical Center’s Tax Status by Kris Maher we learn that the Cit of Pittsburgh has asked a court to remove the tax-exempt status for the University of Pittsburgh Medical Center (UPMC).

UPMC, with 55,000 employees, does not pay payroll taxes to the City and the City is facing a financial shortfall affecting school funding and pension shortfalls.

“The suit claims the regional health system doesn’t meet state requirements that tax-exempt organizations operate without a profit motive. It asks the court to require UPMC to pay payroll taxes dating from March 2007 to the present. The city filed a separate challenge asking a county agency to require UPMC to pay additional property taxes.

… with growth in revenue, which hit $9.6 billion last year. “They haven’t been operating as a charity.” Says Pittsburgh Mayor Like Ravenstahl.”

While UPMC claims to provide charity care in a state with no public hospitals this is being challenged with the hopes of the city and county generating an additional $16 million dollars in revenue.

We have seen this claim often used:

“UPMC said removing its tax exempt status would ultimately hurt the region’s economy.”

Once again we see a large regional medical center claiming to be the injured party as someone; in this case, local government tries to question its motives and its cash flow. The $622 million in charity care and other community benefits it claims to have provided last year pails to total revenue of $9.6 billion. Community benefits were never defined and I have to wonder if they include free testing in shopping malls, with the ultimate end of attracting new patients.

This I hope is a trend as individuals, and even some organizations, are in no position to challenge these large institutions with their well connected boards and unlimited funds for legal defense.

I am impressed that NYU faculty have stood up against he model of the university as corporation.

I can remember a time when University presidents were scholars--Kingman Brewster and Bart Giamatti at Yale are just two examples.

Now,university presidents are former CEOs who really don't grasp the idea of a universities "mission"-- education--teaching students to think critically, to analyze and synthesize, and to use their imaginations. (withou imagination-- "there but for fortune"--compassion is impossible.)

That so many universities have turned away from that mission, and focus instead on "growth" and $$$ helps explains the upside down priorities in our society today.

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